EUR/GBP Rate & Comments for 27th May 2010

EUR/GBP - 1.179

Sterling had a strong day against the euro yesterday as investors sold the single currency on concerns that Europe’s debt problems were far worse than the UK. The pound rose 1% to hit a 2 week high of 1.1808/ £1 in afternoon trading. With the UK election out of the way, the debt risk in the UK still saw the pound suffer against the US dollar but the pound is a far superior option for investors than the single currency. Expectations for growth were boosted earlier in the week when 1st Quarter GDP showed an increase on the initial estimate but mortgage data released yesterday showed that the number of new mortgage approvals fell slightly on the month. Overall though, the number of mortgages approved rose 15.5% for the year and net lending increased by £1.825bn. Out today we have sales data for the UK which is expected to come in at around the same level as last month. Get in touch now for a live price to ensure you take advantage at the right time.

In the Euro zone, the single currency suffered from another round of poor sentiment as investors continued to sell the euro on concerns over sovereign debt. The single currency hovered very close to the 4 year low of $1.2143/ 1 after falling 1.5% against the US dollar. The drop was in part fuelled by the news that China is evaluating its euro bond holdings as it is increasingly worried about the deficit in certain European countries. If China does offload euro holdings, this would presumably be to buy US dollars and we could see the euro plummet further. The markets will be watching this very closely over the coming weeks and months. Get in touch now for a live exchange rate.

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